Kazakhstan arrests head of state uranium company

ALMATY, May 25 (Reuters) - Kazakhstan's security service arrested the head of the state uranium company on suspicion of theft, it said on Monday, the latest in a string of high-profile criminal cases in the Central Asian state. The deepening financial crisis has sharpened divisions among Kazakhstan's ruling elite and triggered a chain of criminal investigations and arrests in government and industry.

In the latest case, KNB, the successor service to Soviet-era KGB, said it had arrested Mukhtar Dzhakishev, the long-serving head of Kazatomprom, one of the world's biggest uranium producers.

Dzhakishev, who presided over Kazatomprom's rise as a global uranium major, is one of Kazakhstan's most well-known business figures. He was sacked from the job last week but it was unclear what led to his dismissal. "A criminal case has been opened," said KNB spokesman Kenzhebulat Beknazarov, adding that a group of other executives were also arrested. "A number of managers in Kazatomprom is being investigated in connection to large scale theft."

Kazakhstan is home to a fifth of global uranium reserves and Kazatomprom has worked closely with global majors to develop into the world's third largest uranium producer.

Kazakhstan is Central Asia's biggest economy and oil producer. It has attracted billions of dollars in foreign investment but has been hit hard by the global economic crisis which has ended a decade of double-digit economic growth.

A string of senior figures including heads of the state railway company and state energy firm KazMunaiGas, have been jailed in what the government describes as a campaign against corruption.

Mukhtar Ablyazov, chairman of biggest bank BTA, nationalised this year, fled Kazakhstan altogether this year following a row with the Kazakh authorities.

Analysts say recent developments highlight tensions in the political circle around President Nursultan Nazarbayev, 68, who has run the country since 1989 but has no clear successor.

Unlike some other leaders of post-Soviet state, he has not publicly picked a possible heir to his rule, heightening intrigue among potential candidates and keeping foreign investors guessing about the continuity of his policies. (Reporting by Raushan Nurshayeva; Writing by Maria Golovnina; Editing by Jon Hemming)